Audit institutes will draft audit reports upon reviewing annual audits prepared by local governments in accordance with Article 34, Paragraph 4, of the Audit Act. When a local government deliberates the said report in its assembly, pursuant to its authority under Article 27 of the Financial Statement Act, it may request information from the relevant audit institute, with the exclusion of original evidence audited by such institute pursuant to Articles 36 and 71 of the Audit Act.

       Article 34, Paragraph 1, of the Audit Act stipulates: "At the end of each financial year, the government shall prepare an annual financial statement and submit it to the audit institute for review." Article 26 of the Financial Statement Act provides: "The Auditor-General shall, within three months after delivery of the annual financial statement prepared by the central government, complete the review process, draft the final audited financial statement, and furnish its report to the Legislative Yuan." Article 27, Paragraph 2, of the same Act states: "During deliberation by the Legislative Yuan, the Auditor-General shall answer questions and provide information. When requested, a representative of the institute responsible for drafting the annual financial statement shall be notified to attend the meeting and answer questions, or to provide information." With respect to the preparation, review and deliberation of the local government*s annual financial statement, Article 34, Paragraph 4, of the Audit Act and Article 31, Paragraph 2, of the Financial Statement Act stipulate that the abovementioned provisions shall be equally applicable.

       Reference to "provide information" in Article 27 of the Financial Statement Act means information required for the deliberation of the report on annual audits, with the exclusion of original evidence audited by the audit institutes pursuant to the law. The Control Yuan has the power to audit (Article 90 of the Constitution), to appoint the Auditor-General (Article 104 of the Constitution), to set up audit institutes throughout the nation, and to permit independent conduct by audit personnel pursuant to the law (Article 14 of the Organic Act of National Audit Office, and Articles 3 to 5, and 10 of the Audit Act). Each institute shall prepare accounting reports in accordance with the provisions of the Accounting Act and the accounting system, and submit them, with the original evidence, for review by the relevant audit institute (Article 36 of the Audit Act). The so-called "original evidence" refers to "evidence which proves any matter and based on which entries are recorded" (Article 51, Paragraph 1, and Article 52 of the Accounting Act). Responsibilities imposed upon personnel with regard to finance shall be terminated once auditing is complete (Article 71 of the Audit Act). The information requested from audit institutes by the local assembly, for its deliberation of the report on the local government*s annual audit, are limited to matters relevant to the administering of the budget, execution of policies, and review and relief of special matters; they are not directly related to the original evidence which is the basis of the audit institutes* audit report.

       In conclusion, audit institutes will furnish audit reports upon reviewing annual financial statements prepared by local governments in accordance with Article 34, Paragraph 4, of the Audit Act. When a local government deliberates the said report in its assembly, pursuant to its authority under Article 27 of the Financial Statement Act, it may request information from the relevant audit institute, with the exclusion of original evidence audited by such institute pursuant to Articles 36 and 71 of the Audit Act.

*Translated by THY Taiwan International Law Offices.